On 1 st January 2016, Soft Ltd acquired 70 of share capital of Hard Ltd for $8,175,000 Equity of Hard Ltd was Share capital $7,600,000 General reserve $2,100,000 Retained earnings $1,200,000 All assets of Hard Ltd were recorded at fair value on acquisition except for an item of marine equipment that had a higher fair value of $360,000 than its carrying amount Cost of the marine equipment was $2,100,000 accumulated depreciation of $1,372,000 Required Use the worksheet below to compute Goodwill or Gain on acquisition and the Non controlling interest using net method Provide the necessary journal entries for Soft Ltd (parent) to eliminate Hards share of pre acquisition capital and reserves Prepare the journal entry to recognise the Non controlling interest Elimination of investment in Hard Ltd Hard Ltd (S) $,000 Soft Ltd (P) $,000 30 NCI $,000 Fair Value of consideration transferred Less FV of identifiable assets acquired and liabilities assumed Share capital on acquisition date Revalue surplus acquisition date Retained earnings acquisition date Fair value adjustment Goodwill Gain on acquisition NON controlling interest

Question

On 1 st January 2016, Soft Ltd acquired 70  of share capital of Hard Ltd for $8,175,000  Equity of Hard Ltd was  Share capital $7,600,000 General reserve $2,100,000 Retained earnings $1,200,000 All assets of Hard Ltd were recorded at fair value on acquisition except for an item of marine equipment that had a higher fair value of $360,000 than its carrying amount  Cost of the marine equipment was $2,100,000 accumulated depreciation of $1,372,000  Required  Use the worksheet below to compute Goodwill or Gain on acquisition and the Non controlling interest using net method  Provide the necessary journal entries for Soft Ltd (parent) to eliminate Hards share of pre acquisition capital and reserves  Prepare the journal entry to recognise the Non controlling interest  Elimination of investment in Hard Ltd Hard Ltd (S) $,000 Soft Ltd (P) $,000 30  NCI $,000 Fair Value of consideration transferred Less  FV of identifiable assets acquired and liabilities assumed Share capital on acquisition date Revalue surplus acquisition date Retained earnings acquisition date Fair value adjustment Goodwill   Gain on acquisition NON controlling interest

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On 1 st January 2016, Soft Ltd acquired 70% of share capital of Hard Ltd for $8,175,000. Equity of Hard Ltd was: Share capital $7,600,000

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Elimination of investment in Hard Ltd	Hard Ltd (S) $,000	Soft Ltd (P) $,000	30% NCI $,000
Fair Value of consideration transferred
Less: FV of identifiable assets acquired and liabilities assumed
Share capital on acquisition date
Revalue surplus-acquisition date
Retained earnings-acquisition date
Fair value adjustment
Goodwill / Gain on acquisition
NON-controlling interest